The Merger — A Tale of Two CPOs

"The Merger" is a procurement short story written by our own Peter Smith and Steve Cobley of Ivalua, the procurement software provider. It is written in four parts and is now available to download as one 'novel' for free here.

The tale follows and scripts the daily lives of two CPOs who find themselves in a situation where their businesses and therefore their own departments have been recently merged: the one, a fully tech-savvy, source-to-pay function, the other, relying on personal expertise, intuition and less integrated or manual processes. The four chapters are significant because they chart the journey: from the initial Meeting, explaining what has happened and the ensuing transformation, meeting your 'opponent' for the first time; to the Problem, the stark realisation that what you do is vastly different from what they do, and the concerns you have over how you will live up to their demands; to the Confession, where you have to face the dragon and own up to your short-comings; to the Future, and how you resolve the issues and find a workable solution.

We learn that, as business has expected more and more from procurement, and procurement has striven to position itself as a strategic arm to the business, the challenges, both technological and at personal level, have increased, and not everyone has lived up to them. We are then given an inside look at where the asymmetries lie, the problems they present, and how the CPOs eventually merge their capabilities to surmount them, learning from each others' skillsets.

The paper throws up some important questions for CPOs and anyone in a merger environment. It has embedded advice on how you get all the pieces to fit together. This is a useful tool for anyone in the procurement profession wishing to understand how the use of systems, tools and communication can bring you actionable intelligence to address your day-to-day challenges. And while doing that, it offers clear advice on what to, and what not to, do when considering process automation.

The following excerpt sets the scene for what is to come:

"This is a merger of equals,” said Andrew Hartson, CEO of RHS Foods. "Joining forces with Larousse Corporation will create one of the largest food manufacturing businesses in the world, with considerable synergies and great opportunities for new product development.”

Jim Roberts sighed as he read the latest press statement from Hartson. Yes, it was exciting, in a way, to be part of a deal that was headline news on the business pages and websites, but it brought a few concerns as well. He had been told what was going on a few weeks ago, but only a small team had actually got really involved with the deal, which was done with great secrecy to make sure no-one else could intervene before the deal was stitched up - perhaps with a counter-bid for Larousse. As the Group Procurement Director, Jim knew he was on the hook to play a major role post merger. That was exciting, but also a little scary. The meeting with the CFO, his boss, that morning had made both of those elements clear ..."

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